Reports and Publications

Policy Brief (English): The effect of supply chain legislation on responsible business conduct

Does stringently designed regulation help positively steer internationally responsible business conduct policies of companies with regard to their global supply chains? The short answer is: yes. Generally speaking, stringent legislation leads to meaningful changes in the responsible behavior of companies concerning human and worker rights. This includes both changes to the business model, where corporate responsibility practices are integrated into a firm’s governance, and improvements in corporate policies to protect worker rights and human rights. The more stringent the regulation, the more far-reaching change.

Policy Brief (Nederlands): IMVO Wetgeving en haar invloed op Responsible Business Conduct

Helpt strengere regulering om het internationaal maatschappelijke verantwoord ondernemen (IMVO) beleid van bedrijven met betrekking tot hun waardeketens positief bij te sturen? Het korte antwoord is: ja. Over het algemeen genomen leidt stringente wetgeving tot betekenisvolle verandering in het maatschappelijk verantwoord gedrag van bedrijven op arbeids- en mensenrechten. Dit omvat zowel aanpassingen in het bedrijfsmodel, waarin IMVO-overwegingen een prominentere rol gaan spelen in de besluitvorming van het bedrijf, als het daadwerkelijke beleid dat een bedrijf voert, bijvoorbeeld op het gebied van arbeids- en mensenrechten. Hoe stringenter de wetgeving, hoe verregaander de verandering.

Working Paper 01 Aug 2024: Investigating the effectiveness of supply chain regulations

Governmental supply chain regulations have proliferated over the last decade, but national laws vary in terms of their shape, material scope, supply chain scope, monitoring and enforcement methods, and relationship to legal liability. This is likely to lead to variation in regulatory stringency. In this study, we analyze whether such variation matters when it comes to shaping company policies related to human rights and labor protection. Specifically, we focus on how regulatory stringency across countries and over time shapes corporate policies to address human and worker rights and examine its potential effectiveness as a regulatory instrument. We empirically test our expectations by combining detailed firm-level time-series data with an innovative measure of the regulatory stringency of laws and norms across OECD countries. Our findings support the hypothesis that regulatory stringency has a positive impact on responsible business conduct, especially among companies that were lagging behind prior to regulation. The analyses have important implications for the study of human rights due diligence and, more broadly, corporate governance.

Research Article (2024): Smart mix politics: business actors in the formulation of global supply chain regulation

The European Union and other advanced economies are turning to mandatory due diligence regulation to address environmental and human rights risks in their global supply chains. This shift is accompanied by calls for ‘smart regulation’ that combines public legislation with private governance instruments and new supporting measures in the producer countries of the Global South. We study the smart regulation agenda in the case of the European Union Deforestation Regulation. We reveal how its progressive rhetoric masks a conservative undertone as business actors and their civil society partners aim to safeguard their vested interests in the age of public supply chain regulation. However, by tracing their lobbying efforts throughout the policy formulation process, we show how this does not imply en bloc support for voluntary, softer forms of regulation. Moreover, these actors exhibit varying motivations and preferences for involving Southern actors in such a mix.

Research Article (2024): Advancing sustainability through supply chain legislation? A policy trilemma

Supply chain laws regulate firms active on home markets, but in terms of environmental and human rights risks also apply to global supply chains. Legislative initiatives assume that firms have the ability to influence many suppliers and their conditions of production abroad. Illustrated by the urgent case of garment production exported to Europe, we conclude that current import-export relations could limit the scope and impact of such supply chain legislation. If patterns as visible in the garment sector hold more broadly, policymakers that are ambitious about the impact of supply chain legislation on environment and human rights face a policy trilemma: they must sacrifice one out of three current design features of such legislation: designing legislation unilaterally for their home markets, letting regulation apply to supply chains across the world, or giving firms the ability to freely choose their suppliers. We discuss the different combinations of design options that could advance sustainability in supply chains.

HIGHLIGHTED REPORTS FROM AFFILIATES AND PARTNERS

HIGHLIGHTED REPORTS FROM AFFILIATES AND PARTNERS

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